Slide 1: Q3 2016 Results
Q3 2016 Results November 22, 2016
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company’s plans, strategies, business prospects, changes and trends in its business and the markets in which it oper
Slide 3: Agenda
Agenda 1 Highlights 2 Financial Performance 3 Market Outlook 4 Summary and Q&A 3
Slide 4: Summary highlights: Q3 2016
Summary highlights: Q3 2016 Operations Seadrill Limited economic utilisation of 95% Commercial Active spot market Costs Expecting cost savings to be more sustainable 4
Slide 5: Operational highlights: Q3 2016
Operational highlights: Q3 2016 Current backlog 2000 1500 Current order backlog of $3.0 billion $ million $7.0 billion for Seadrill Group 1000 500 0 2016 2017 2018 2019+ Economic utilization (floater fleet) 100 95 Safe and efficient operations Utilization % 90 85 98 94% economic utilization
Slide 6: Deferring newbuilds
Deferring newbuilds No instalments due in 2016 All newbuilds successfully deferred from original deliveries 2017 scheduled deliveries as currently contracted 5 Jack-Ups with Dalian 2 Drillships with Samsung 1 Semi-Submersible with Cosco We don’t plan to take deliveries in 2017 without
Slide 7: Financial performance highlights
Financial performance highlights Financial Performance 7
Slide 8: Revenue & EBITDA bridge
Revenue & EBITDA* bridge Revenue • Volume: Full quarter of operations 950 for the West Eclipse and the 900 commencement of operations for the 850 West Vigilant 800 750 • Dayrates: Reduced dayrate on the West Freedom, West Gemini and 700 AOD I and II 650 600 • Utilization: Reduced uptime 550 2Q16 Vol
Slide 9: Impairments
Impairments Loss on impairment of investments SDLP 806 Seamex 76 Total 882 9
Slide 10: Balance sheet main movements
Balance sheet main movements Quarter Mai over quarter September 30, June 30, Change 2016 2016 Marketable securities – current 93 141 (48) Accounts receivables 630 727 (97) Investment in associated companies 2,014 2,656 (642) Current portion of long term debt 3,136 2,347 789 Other current liabilities
Slide 11: Restructuring update
Restructuring update Good progress on an agreement to re-profile and defer all bank facilities Restructuring plan reduces fixed amortization and amends financial covenants Initiated engagement with bondholders and new capital participants Extension of West Eminence facility provides time to
Slide 12: Guidance
Guidance Q4 2016 guidance EBITDA* is forecasted to be around $340 million, based on forecasted Operating Income of around $146 million. * EBITDA is defined in the Appendix 12
Slide 13: Market Outlook
Financial performance highlights Market Outlook 13
Slide 14: Concluding remarks
Concluding remarks Strong operating quarter Cost reductions proving to be more sustainable Continue to manage yard commitments Good progress on restructuring plan 14
Slide 15: Q&A
Q&A 15
Slide 16: Appendix: Seadrill Limited Financials
Appendix: Seadrill Limited Financials 16
Slide 17: Appendix – Non-GAAP Financial Measures
Appendix – Non-GAAP Financial Measures * EBITDA is defined as 'Earnings Before Interest, Tax, Depreciation and Amortization' and has been calculated by taking operating income plus depreciation and amortization, but excluding gains or losses on disposals and impairment charges against goodwill. Cont
Slide 18: Financial Performance Highlights
Financial Performance Highlights Q3 2016 Q2 2016 Change % Change Total operating revenue $743 $868 ($125) (14%) Contingent consideration realized $5 $5 $— —% Total operating expenses $501 $509 ($8) (2%) Net operating income $247 $364 ($117) (32%) EBITDA $441 $557 ($116) (21%) 18
Slide 19: Balance Sheet Summary
Balance Sheet Summary September 30, June 30, Change %Change 2016 2016 • Total assets of Total Current Assets $2,907 $3,056 ($149) (5%) $22,043 million as at Non-current assets —% September 30, 2016 Investment in associated $2,014 $2,656 ($642) (24%) companies Newbuildings $1,518 $1,507 $11 1% • Tota
Slide 20: Operating Income - 3Q16
Operating Income - 3Q16 Unaudited accounts in USD millions Total Floaters Jack-ups Other Contract revenues 657 462 195 — Reimbursable revenues 15 11 4 — Other revenues 71 55 — 16 Total operating revenues 743 528 199 16 Contingent consideration realized 5 5 — — Vessel and rig operating expenses 243 1
Slide 21: Operating Income - Floaters
Operating Income - Floaters Unaudited accounts in USD millions 3Q16 2Q16 1Q16 4Q15 Total operating revenues 528 610 616 644 Loss on disposals* — — — (89) Contingent consideration realized 5 5 5 19 Vessel and rig operating expenses 161 152 181 235 Reimbursable expenses 10 13 14 29 Depreciation and am
Slide 22: Operating Income – Jack-up Rigs
Operating Income – Jack-up Rigs Unaudited accounts in USD millions 3Q16 2Q16 1Q16 4Q15 Total operating revenues 199 234 246 282 Loss on disposals — — — (4) Vessel and rig operating expenses 69 75 88 107 Reimbursable expenses 3 1 4 — Depreciation and amortization 51 51 52 50 General and administrativ
Slide 23: Operating Income – Total Seadrill Limited
Operating Income – Total Seadrill Limited Unaudited accounts in USD millions 3Q16 2Q16 1Q16 4Q15 Total operating revenues 743 868 891 959 Loss on sale of assets* — — — (93) Contingent consideration realized 5 5 5 19 Vessel and rig operating expenses 243 248 290 369 Reimbursable expenses 13 14 18 29
Slide 24: Net Income – Total Seadrill Limited
Net Income – Total Seadrill Limited Unaudited accounts in USD millions 3Q16 2Q16 1Q16 4Q15 Net operating income/(loss) 247 364 328 223 Financial items and other income Interest income 17 16 20 18 Interest expense (98) (105) (102) (98) Loss on impairment of investments (882) — (24) — Share in results
Slide 25: Balance Sheet - Assets
Balance Sheet - Assets Unaudited accounts in USD millions September 30, June 30, 2016 December 31, 2016 2015 Current assets Cash and cash equivalents 1,250 1,287 1,092 Restricted cash 117 96 104 Marketable securities 93 141 286 Accounts receivables, net 630 727 710 Other current assets 817 805 949 T
Slide 26: Balance Sheet – Liabilities & Shareholder’s Equity
Balance Sheet – Liabilities & Shareholder’s Equity Unaudited accounts in USD millions September 30, June 30, 2016 December 31, 2016 2015 Current liabilities Current portion of long-term debt 3,136 2,347 1,278 Trade accounts payable 122 158 152 Other current liabilities 1,635 1,810 1,804 Total curren